Standard VI(b): conflicts of interest / standards for nonpublic information perhaps, understand, interest, standards, material

PieMan

From Standards of Practice Handbook p 160:

"Members and candidates are prohibited from conveying nonpublic information to any person whose relationship to the member or candidate makes the member or candidate a beneficial owner of the person's securities. Members and candidates must not convey this information to any other person if the nonpublic information can be deemed material."

I do not understand what they are getting at here. Can someone please help me understand this and perhaps point me to a sample question that highlights the point?